Social Media Projected To Lead Global Ad Spend In 2021

Global digital ad spending is projected to grow 10.1% YoY, powered by 18% growth in social media, according to a report from Dentsu, an advertising and public relations company based in Japan.

In China, social media ad spending is forecast to rise 29.6%.

Source: David Marlin

In the U.S., digital ad spending is projected to grow 17% YoY after only 5% growth in 2020, according to estimates from Credit Suisse. Based on these numbers, ad-tech companies like Facebook (FB), Pinterest (PINS), Snapchat (SNAP), and Twitter (TWTR) should continue to benefit from growth in digital ad spending in 2021.

For Q1 2021, Snapchat reported first quarter results that exceeded expectations for revenue, earnings per share, and global daily active users. The company also delivered positive Free Cash Flow for the first as a public company.  

Like many stocks that did well in 2020, tougher comps for Pinterest started in March. We anticipate a small deceleration YoY due to tougher comps, with strong international growth. Despite usage trends being mixed, if we see an ad rebound, revenue can still climb higher.

For Twitter, we anticipate a solid quarter, but not on the same level as Snapchat and Pinterest due to recent download data. Twitter daily active users are trending up, but downloads struggled in March more than Snapchat and Pinterest, which faced equally difficult comps. We also expect solid results from Facebook due to less impact from privacy changes at Apple than expected and strong spending in digital advertising.

Below we look at Snapchat’s Q1 2021 results and preview Pinterest, Twitter and Facebook. But first, we take a closer look at download and monthly active user trends.

Downloads and MAUs Struggle Against Tougher Comps

Social media downloads were mixed in Q1, with Snapchat and Pinterest showing the strongest download trends YoY.

Source: David Marlin

Next we look at the top 10 apps in the U.S. in Q1 2021 by download and MAU. Facebook, Instagram, and Facebook Messenger continued to be top apps by download and MAU.

Snapchat appears on top 10 charts for downloads and MAU. The app moved up two spots in downloads with no change for monthly active users. Pinterest and Twitter made it to the bottom of the chart for monthly active users, with Pinterest moving down one spot, indicating less engagement. Twitter saw no change in monthly active users.

Q1 2021: Top Apps in the US by Downloads vs Q4 2020

Q1 2021: Top Apps in the US by MAU  vs Q4 2020

Next we look at the top 10 apps worldwide in Q1 2021 by downloads and MAU. Globally, Facebook, Instagram, and Facebook Messenger continue to be top apps by download and MAU. While Snapchat was a top downloaded app globally, it is down slightly from Q4 2020. Outside of the Facebook family of apps, only Twitter made it onto the list of top global apps by MAU and it was down slightly from last quarter.

Q1 2021: Top Apps Worldwide by Downloads vs Q4 2020

Next we take a closer look at Snapchat, which reported April 22 after market.

Snapchat: Active Advertiser Base Doubles

Snapchat executives struck a bullish tone in its Q1 2021 earnings report, noting that engagement trends remained positive as users began socializing in larger groups. The company’s active advertiser base approximately doubled year-over-year in Q1, and traditionally strong categories, such as theatrical films, have started to return.

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